Dubai World negotiates debt plan

Creditors meet in UAE to discuss restructuring conglomerate's $26 billion debt.

    Dubai's economy grew on the back of a real estate boom, but was hard hit by the economic crisis [AFP]

    "To make that negotiation process easier, seven banks that are owed money have formed a panel that will negotiate with Dubai World directly about what potentially these new payment terms could be.

    "We understand that today they may be receiving an offer from Dubai World with a concrete list of what they can pay and when."

    Repayment options

    Our correspondent said the company could put forward one of two options.


      Watch Al Jazeera's weekly business show
      At cruising altitude ... the Dubai Airshow
      Counting the cost of Dubai's financial crisis
      Read Al Jazeera's business blog

    "The first option is paying on time, but not paying the full rate.

    "It could be as high as 40 per cent if they have to pay these bonds back on their due date. It's unlikely the banks are going to be interested in accepting that," he said.

    "The second option is that they do pay back in full, but they pay back over a longer period of time.

    "If they go down that path they have to negotiate what interest rate that money will be accruing."

    Dubai World sent shockwaves across financial markets last year when it said it would not be able to repay the debt on time and asked for a six-month freeze on debt payments.

    Four billion dollars of the debt was supposed to be paid off in December, but Abu Dhabi's government stepped in with the funds.

    Dubai's government has said it has received $10bn from Abu Dhabi to help it repay an Islamic bond and fund the troubled property developer Dubai World.

    Dubai's economy grew at a rapid rate in recent years on the back of a real estate boom, but it was hard hit by the global economic crisis which caused a shortage in available finance for the emirate's ambitious projects.

    SOURCE: Al Jazeera and agencies


    The Victorian Muslims of Britain

    The Victorian Muslims of Britain

    The stories of the British aristocrats who converted to Islam.

    Going undercover as a sex worker

    Going undercover as a sex worker

    A photojournalist describes how she posed as a prostitute to follow the trade in human flesh.

    India's shocking farmer suicide epidemic

    India's shocking farmer suicide epidemic

    Falling into a debt-trap and besieged by bad weather, thousands of farmers are taking their own lives each year.